By Randall Osborne

West Coast Editor

NEW YORK - In an industry already beset by hard financing times, the FDA could blindside companies with costly demands that would slow the review process even more, a panel told attendees at the Biotechnology Industry Organization (BIO) CEO & Investor Conference.

"From 1992 to 1999, we saw review times go from about 30 months down to 11 months," said William Slattery, a partner in Deerfield Management, of New York. "Last year, the review time jumped 40 percent. What happened on Friday scared the living daylights out of the market."

Schering-Plough Corp., of Madison, N.J., was "shot in the head" because of unspecified FDA questions about the company's manufacturing practices, Slattery said. The firm's stock (NYSE:SGP) closed Friday at $41.25, down 15 percent.

"I can't read the mind of the agency," Slattery told audience members at a CEO roundtable on investing during the conference, which closed Wednesday. "I tried that once with the Integrilin advisory panel, and I was wrong."

In 1998, Cor Therapeutics Inc. lost half its share value after the FDA panel gave limited recommendation for approval of Integrilin, an anti-clotting agent, partnered with Schering-Plough. (See BioWorld Today, Jan. 30, 1998.)

BIO President Carl Feldbaum said low morale at the FDA and lack of staffers qualified to evaluate cutting-edge developments in biotechnology are likely to cause even more trouble.

"We're really going to be challenged to keep the FDA from becoming a choke point," Feldbaum told BioWorld Today. "They can't afford to hire or retain people to keep up with our science."

He said he has urged the federal administration to install a new FDA commissioner soon - especially before appropriations talks begin. Overall, Feldbaum said, "there's a new sense of displeasure with [the agency's] performance. I don't think it's necessarily a conscious slowdown."

Instead, he blamed a "number of factors. One is the sheer number of drugs in the pipeline that are under review, more drugs than ever. Two, there are some morale problems at the agency, some pay related and others leadership related. Right now, [the agency] has no leader, and this won't get better until it does."

Although Wednesday's luncheon speaker, Nathan Myhrvold, president of Bellevue, Wash.-based Intellectual Ventures LLC, predicted "exponential" growth in the industry overall, thanks to genomics findings, Feldbaum was more circumspect.

"It's geometric, is what I would call it," he said. BIO itself has "doubled in the last 18 months in terms of staff, our revenues are up 30 [percent] to 35 percent a year, and our membership continues to grow. There's a goal of 1,000 members this year." The Washington, D.C.-based group now lists 960 members.

Feldbaum said the age and experience of biotechnology's CEOs, which is not often mentioned, promises durability for the industry - whatever the vagaries of the market and the FDA.

"They have been there, done that, been through one economic cycle after another," he said. "They don't know when the markets will reopen, but they've got a lot more in the bank and a lot more experience. They're the same people, and they haven't gone away. There's a hard, rock confidence, [saying] 'Sure it will be back, and we'll be here when it does, and we know how to reach into that cookie jar when it comes around.'" n